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Six Sigma in Construction
Management | Construction
Accounting Services | Construction
Advisory Services
Mar. 25th, 2015 Send to Kindle
The construction industry faces a distinct challenge when it comes to customer
service. Few other businesses have the customer standing right in front of them
while the product in question is being assembled. Yet that’s the case in
construction, where many owners pay regular site visits to monitor — and
sometimes micromanage — the building process.
For this reason, it can benefit contractors to pay close attention to customer
service and, if necessary, think creatively for ways to avoid costly conflicts. One
approach to consider is “Six Sigma” for construction management — a
disciplined, data-driven methodology for improving any business process, but
particularly useful in improving customer service.
What’s the purpose of Six Sigma?
Six Sigma is all about identifying and eliminating “defects.” The word “defect”
doesn’t refer only to mistakes but also to any result that fails to meet customer
specifications or could lead to a process likely to dissatisfy customers.
Companies that implement Six Sigma should expect to undertake continuous
efforts to achieve stable and predictable process results. For contractors, these
efforts could apply to every stage of a construction project — from sales to
bidding to on-site operations and in-house financial management.
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Like so many of today’s business-improvement models, the practice is also
heavily focused on statistics. A tenet of Six Sigma is that every company’s
processes have characteristics that can be measured, analyzed, improved and
controlled. Accomplishing this objective, however, calls for a total
organizational commitment — particularly from you, the owner and other top-
level managers.
How does Six Sigma work in construction management?
Businesses that undertake a Six Sigma program generally must choose from
two primary methodologies. For improving an exis/ing business process, you'll
navigate “DMAIC,” an acronym for define, measure, analyze, implement and
control. For creating a zew product or process, you'll deal with “DMADV,” an
acronym for define, measure, analyze, design and verify.
Because most contractors are likely looking to improve an established approach
to customer service, let’s focus on DMAIC. It will ask you to follow five stages:
1. Define the problem you're trying to solve. Don’t just look at it from your own
perspective. You'll need to “speak in the voice” of your customers and point to
specific goals.
2. Measure key aspects of the process. Target metrics that will enable you to
measure progress toward the stated goal, by collecting relevant data.
3. Analyze the data, looking for cause-and-effect relationships. Here, you'll put on
your investigator’s hat and look for the root of the defect you’re seeking to
eliminate.
4. Improve the current process. Six Sigma will recommend data analysis
techniques for using the information gathered and reconfiguring the process in
question. You can then set up tests to establish whether the improvement is
real.
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5: Control the process going forward. Yow’!\ be guided through steps to set up
systems for monitoring the improved process once you’ve implemented it.
Will we find answers?
A carefully executed Six Sigma program should provide specific answers about
what you can do to better serve customers. Eliminating defects means you'll
spend less time putting out fires and more time completing quality work. In
turn, you'll be able to stay within your cost estimates and thereby improve your
odds of getting more referrals and repeat business.
Plus, Six Sigma’s “control” phase often allows contractors to tighten their
financial management procedures. These could enable you to free up cash flow
and better leverage the growth value of your existing customer relationships.
Implementing Six Sigma in construction management
Are your construction company’s sales lagging? Are you losing time and money
to conflicts and miscommunications with customers? If so, Six Sigma may be a
way to overhaul your customer service process, untangle the snags slowing you
down, and work more efficiently and profitably.
Of course, there are no guarantees. So, before jumping in, spend some time
researching the deeper details of Six Sigma to make sure it’s for you. If it is,
then set a budget for how much money you'll invest in the effort.
Construction Accounting Services
Have questions on Six Sigma in construction management or simply looking for
construction accounting and advisory services? Contact Marvin Willis, CPA,
CITP at 404.874.6244 and or simply fill out our form below and we’d be glad to
help.
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